Fair trade regulator Competition Commission of India (CCI) has approved the merger of global IT service provider iGate Corp's two group firms, iGate Computer Systems (formerly Patni Computer) and iGate Global Solutions.
CCI said in an order released today that proposed combination "is not likely to have an appreciable adverse effect on competition in India" as it was a restructuring exercise within a group.
Both iGate Computer Systems (ICSL) and iGATE Global Solutions (IGSL) are engaged in the business of export of IT and IT enabled services in India and abroad.
CCI observed in the order, dated November 20, that there was no vertical arrangements between IGSL and ICSL and the control over activities carried out by the two before and after the proposed amalgamation would remain with iGate.
"...the proposed combination is a restructuring between the enterprises belonging to the same group, the proposed combination is not likely to give rise to any adverse competition concern in India," CCI said.
As per the order, iGate Corporation and its wholly owned subsidiary iGate hold 24.79 per cent and 75.21 per cent stake in IGSL respectively.
On the other hand, ICSL, formerly known as Patni Computer System), was acquired by iGate Corporation through its subsidiaries IGSL and Pan Asia iGate Solutions. The companies had acquired 61.29 per cent stake in ICSL.
At present, Pan Asia iGate Solutions and IGSL hold 97.47 per cent shares of ICSL, CCI said.
As per the order, ICSL was delisted from National Stock Exchange and the BSE with effect from May 28, 2012.
A notice seeking the Commission's approval was submitted by the two companies on November 5. The deal was approved by the respective boards of the entities on October 26, 2012.